Business Taxes Law Guide – Revision 2015

Sales And Use Tax Law

ANALYSIS OF THE CALIFORNIA SALES AND USE TAX LAW

What is required of consumers purchasing tangible personal
property subject to use tax.

(a) When purchasing from retailers engaged
in business in this state or authorized by the board to collect the tax:

(1) The consumer must at the time of the sale or making of lease
payments pay the tax to the retailer and obtain a receipt therefor, which
receipt should be retained by the consumer.

(2) If the consumer neglects or refuses to pay the tax imposed by the act
to such retailer, a determination of the amount of tax due may be levied
against the consumer and a 10-percent penalty added thereto.

(b) When purchasing or leasing from retailers not engaged in business in
this state or not authorized by the board to collect the tax, use tax must be reported in one of the following ways:

For consumers who receive at least $100,000 in gross receipts from business operations per calendar year, by electronically filing a return for the previous calendar year by April 15.

For all other consumers, either on the California state income tax return, or
on a return filed with the board on or before the last day of the month following each
quarterly period during which tangible personal property, the storage, use or
other consumption of which is taxable, is purchased or leased, except that
the board may require, in some cases, filing of returns for other than quarterly
periods.

(c) All sellers of certain mobilehomes, vehicles, vessels, and aircraft are
retailers unless another person is the retailer as provided under Sec. 6275(b).
Consumers purchasing vehicles from persons or firms other than
manufacturers, remanufacturers, dealers, dismantlers or lessor-retailers
certificated and licensed under the Vehicle Code may be liable for use tax
unless the transaction comes within some exemption provided in the law. If
the tax is due, it will be collected by the Department of Motor Vehicles at the
time the taxpayer registers his vehicle in California.

(d) Consumers purchasing a vessel or aircraft, unless exempt or purchased
from a retailer to whom tax was paid and a receipt obtained, are liable for
use tax measured by the purchase price of the vessel or aircraft. The
Department of Motor Vehicles collects the use tax on sales of undocumented
vessels required to be registered under the Vehicle Code.